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Managed-Care Health Plans Can't Seem to Cure Epidemic of Paperwork

Medicine: Companies take over a big chunk of physicians' administrative duties. But still doctors' chores grow, especially for 'gatekeepers.'


Ruth Donati went to work as a receptionist for a group of five pediatricians in Towson, Md., 16 years ago. Then, using an old punch-card machine, it took the equivalent of 1 1/2 people to do the paperwork for the practice.

Since then, the office has modernized. Felix Kaufman says the doctors have spent $100,000 on computer systems. The practice has joined Premier Medical Group, which is taking over a chunk of the administrative chores.

So it doesn't take 1 1/2 people to handle the paperwork anymore. It takes three.

"It's gotten better, but it's gotten worse," says Donati, now the office manager. "Computers help you organize, but they don't cut down any on your work."

Managed-care plans are supposed to hold down health care costs, but nobody says they hold down paperwork.

Rather than just pay doctors for whatever work they do, managed-care plans set up various systems to watch expenses--and those systems require ever-more paperwork from medical practices.

"It's due to some of these requirements that the growth of health care costs has been kept down," says Jonathan Weiner, professor of health policy and management at the Johns Hopkins School of Public Health.

Still, these plans are costing doctors time and money. Overall, administrative overhead consumes between 10 and 20 cents of every health-care dollar spent in the United States, he said. With about $1 trillion a year going to health care, that's $100 billion to $200 billion.

According to the American Medical Assn., nonphysician payrolls jumped from about $30,000 a year per doctor in 1982 to nearly $70,000 in 1993.

The burden is particularly heavy on so-called "gatekeeper" physicians--internists, family practitioners and pediatricians. These primary-care doctors have the say as to whether patients can see specialists in 94% of managed-care plans, according to a study published in January in the New England Journal of Medicine. Practically speaking, that means if a patient wants to see a specialist, he or she must first contact the gatekeeper, and the gatekeeper must then generate a form or fax or make a phone call.

"That's the biggest headache, and the biggest change in the way patients get their care," says Robert A. Berenson, medical director of National Capital Preferred-Provider Organization and one of the authors of the New England Journal study.

But Berenson argues that much of medical practices' increase in complexity is "falsely placed on managed care" when it is in fact due to larger physician groups, modern technology and other factors.

But according to a 1994 survey of multispecialty group practices by the Medical Group Management Assn., a trade and professional organization, practices receiving less than 10% of their revenue from managed care have 4.45 staff members per doctor, whereas those getting the majority of revenue from managed care have 5.23.

According to the group's David Gans, for those practices that get a majority of their revenue from managed care, for every five doctors, there's a full-time person dealing with managed-care administration. That's in addition to the staff members who do the billing, medical records and so on.

When representatives of managed-care firms first began showing up seeking to sign up Kaufman's pediatric group, he says, the doctors looked over the plans, trying to pick a few "good ones."

That worked only for a while. More employers began turning to managed care as the costs of providing traditional indemnity plans began to skyrocket. The pediatricians found they were losing patients to practices that were members of managed-care plans. The doctors subsequently decided to join virtually any plan; they now participate in 34 of them.

Their experience mirrors that of doctors nationwide. According to the AMA, the proportion of doctors with one or more managed-care contracts grew from 61% in 1990 to 77% in 1994, "and many have multiple contracts," says Jack Segal, an AMA spokesman.

That means forms and more forms: Each insurer has its own set.

Consider the credentialing forms. Kaufman points out that each time he joins a new managed-care plan--and then every two years thereafter--he must complete a form detailing his training, experience and in-service courses. A typical such form is about a dozen pages and takes him about an hour, he says.

Premier Medical Associates, the larger group his practice has joined, now handles those forms for him. Ann B. Gilbert, chief operating officer of Premier, says dealing with the administrative work of managed care is a big motivator for doctors to join groups like hers.

As an alternative to joining Premier, doctors can hire the company to do administration. A Medical Group Management Assn. survey found 9% of practices using such "management service organizations," or MSOs.

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